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🧵Consumer prices fell 0.6% in 🇨🇦 in Dec., yr/yr CPI growth fell to 6.3% (from 8.1% in June). This is good. But lest anyone interpret this as evidence that Bank of Canada tightening is 'working', or relief is imminent, let's review the short history of this inflation. #cdnecon /2
Pandemic caused big breaks in global supply (not fully repaired yet) & big shifts in global demand (mostly, not fully, rebalanced). Govt stimulus maintained aggregate demand & prevented a depression. For a short time, demand exceeded supply (mostly due to constrained supply). /3 
Quick phase-out of COVID supports then cut household spending power quickly; it is now below pre-COVID trend. Supply has rebounded but still not caught up to pre-COVID trend. We are currently in a situation where both supply and demand are below potential. /4
This is of course - how most politely to put it - poppycock. Yes, the official so-called active cases count is dropping but that is not because India has the epidemic under control. New cases, officially, are at 85 k plus per day, deaths at 1100 a day.
Unofficially, of course, no one has a clue what the real numbers are. This is just the kind of false optimism and pseudo-science that today's Lancet editorial is all about. India is shoring up big real problems.
thelancet.com/action/showPdf…
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This fetish with recovered cases is a peculiar affliction of those who want to put a falsely positive spin on the #epidemic. #Coronavirus infection is an illness that naturally recovers, (unless it kills). Recovery does not mean a bounce back to vigorous health for 10-15% of..
